S. No.

Section

Particulars

Limit of exemption

Exemption available to

A. Under the head Salaries

1.

10(7)

Any allowance or perquisite paid or allowed by Government to its employees posted outside India

Entire Amount

Individual- Salaried Employee (being a citizen of India)

2.

-

Allowances to Judges of High Court/Supreme Court

Exempt, subject to certain conditions.

Individual - Judges of High Court/Supreme Court

3.

-

Salary and allowances received by a teacher /professor from SAARC member state (Subject to certain conditions).

Fully Exempt

Individual - Teacher from SAARC member State

4.

16 (ii)

Entertainment Allowance received by the Government employees (Fully taxable in case of other employees)

Least of the following is exempt from tax:

a) Rs 5,000

b) 1/5th of salary (excluding any allowance, benefits or other perquisite)

c) Actual entertainment allowance received

Individual - Government Employee

5.

10(13A)

House Rent Allowance (Sec. 10(13A) & Rule 2A)

Least of the following is exempt:

a) Actual HRA Received

b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)

c) Rent paid minus 10% of salary

* Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission

Note:

  i. Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent

 ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].

Individual - Salaried employee

6.

10(14)

Children Education Allowance

Up to Rs. 100 per month per child up to a maximum of 2 children is exempt

Individual - Salaried employee

7.

10(14)

Hostel Expenditure Allowance

Up to Rs. 300 per month per child up to a maximum of 2 children is exempt

Individual - Salaried employee

8.

10(14)

Transport Allowance granted to an employee to meet expenditure for the purpose of commuting between place of residence and place of duty

Rs. 3,200 per month granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with disability of lower extremities

Individual – Salaried Employee

9.

Sec. 10(14)

Allowance granted to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance.

Amount of exemption shall be lower of following:

a) 70% of such allowance; or

b) Rs. 10,000 per month.

Individual - Salaried employee

10.

10(14)

Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office

Exempt to the extent of expenditure incurred for official purposes

Individual - Salaried employee

11.

10(14)

Any Allowance to meet the cost of travel on tour or on transfer

Exempt to the extent of expenditure incurred for official purposes

Individual - Salaried employee

12.

10(14)

Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

Exempt to the extent of expenditure incurred for official purposes

Individual - Salaried employee

13.

10(14)

Helper/Assistant Allowance

Exempt to the extent of expenditure incurred for official purposes

Individual - Salaried employee

14.

10(14)

Research Allowance granted for encouraging the academic research and other professional pursuits

Exempt to the extent of expenditure incurred for official purposes

Individual - Salaried employee

15.

10(14)

Uniform Allowance

Exempt to the extent of expenditure incurred for official purposes

Individual - Salaried employee

16.

Sec. 10(14)

Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per month.

Individual - Salaried employee

17.

Sec. 10(14) read with Rule 2BB

Border area allowance Remote Locality or allowance or Disturbed Area allowance or Difficult Area Allowance (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per month.

Individual - Salaried employee

18.

Sec. 10(14)

Tribal area allowance in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Odisha

Up to Rs. 200 per month

Individual - Salaried employee

19.

Sec. 10(14)

Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 2,600 per month

Individual - Salaried employee

20.

Sec. 10(14)

Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 1,000 per month

Individual - Salaried employee

21.

Sec. 10(14)

Counter Insurgency Allowance if this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 3,900 per month

Individual - Members of Armed Forces

22.

Sec. 10(14)

Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines

Up to Rs. 800 per month

Individual - Salaried employee

23.

Sec. 10(14)

High Altitude Allowance is granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)

 a) Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet)

 b) Up to Rs. 1,600 per month (for altitude above 15,000 feet)

Individual - Members of Armed Forces

24.

Sec. 10(14)

Highly active field area allowance is granted to members of armed forces (Subject to certain conditions and locations)

Up to Rs. 4,200 per month

Individual - Members of Armed Forces

25.

Sec. 10(14)

Island Duty Allowance is granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)

Up to Rs. 3,250 per month

Individual - Members of Armed Forces

26.

-

City Compensatory Allowance

Fully Taxable

Individual - Salaried employee

27.

-

Fixed Medical Allowance

Fully Taxable

Individual - Salaried employee

28.

-

Tiffin/Lunch/Dinner/Refreshment Allowance

Fully Taxable

Individual - Salaried employee

29.

-

Servant Allowance

Fully Taxable

Individual - Salaried employee

30.

-

Dearness Allowance

Fully Taxable

Individual - Salaried employee

31.

-

Project Allowance

Fully Taxable

Individual - Salaried employee

32.

-

Overtime Allowance

Fully Taxable

Individual - Salaried employee

33.

-

Telephone Allowance

Fully Taxable

Individual - Salaried employee

34.

-

Holiday Allowance

Fully Taxable

Individual - Salaried employee

35.

-

Any Other Cash Allowance

Fully Taxable

Individual - Salaried employee

36.

16(ia)

Standard Deduction

Under regular tax regime:

  •  Rs. 50,000 or the amount of salary, whichever is lower

Under Alternative Tax Regime [Section 115BAC)

  •  Rs. 75,000 or the amount of salary, whichever is lower

Individual – Salaried Employee & Pensioners

B. Under the head Income from house property

1.

First proviso to section 23(1)

Municipal tax levied by local authority and borne by owner in respect of house property

Amount actually paid during the relevant previous year

All assessee

1A.

23(5)

No Notional income for house property held as stock-in-trade

Any building and land appurtenant thereto held as stock-in-trade which is not let during the whole or any part of the previous year.

Annual value of such property for the period upto two year from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to be Nil.

All assessee

2.

24(a)

Standard Deduction

30% of the Annual Value (Gross Annual Value- Municipal Taxes)

All assessee

3.

24(b)

Interest incurred on borrowed capital

Interest on borrowed capital is allowed as deduction from income from house property as under:

a) Up to Rs. 2,00,000 (if amount is borrowed for construction/acquisition of self-occupied house property on or after 01-04-1999), subject to certain other conditions

b) Up to Rs. 30,000 (if amount is borrowed for reconstruction, repair or renewals of self-occupied house property)

c) Actual amount of interest paid or payable during the year (in case of let-out property)

d) Pre-construction period interest is allowed in 5 equal  annual installments (Subject to certain conditions)

Note:

With effect from Assessment Year 2020-21, deduction for interest paid or payable on borrowed capital shall be allowed in respect of two self-occupied house properties. However, the aggregate amount of deduction under this provision shall remain same i.e., Rs. 30,000 or Rs. 2,00,000, as the case may be.

All assessee

4.

Section 25A

Standard Deduction from arrears of rent or unrealized rent received subsequently

30% of arrears of rent or unrealized rent.

All assessee

C. Under the head Profits and gains from business or profession

1.

32(1)

Depreciation in respect of:

i) Tangible assets (buildings, machinery, plant or furniture);

ii) Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession)

Depreciation shall be allowed at prescribed percentage on actual cost of an asset.

However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.

Taxpayer engaged in business of generation or generation and distribution of power.

Note:

Taxpayer engaged in business of generation or generation and distribution of power have the option to claim depreciation either on straight line basis or written down value basis.

2.

32(1)

Depreciation in respect of:

i) Tangible assets (buildings, machinery, plant or furniture);

ii) Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession)

Depreciation shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method).

However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.

All assessees

3.

32(1)(iia)

Additional depreciation on new plant and machinery (other than ships, aircraft, office appliances, second hand plant or machinery, etc.) shall be allowed subject to certain conditions.

Additional depreciation to be allowed at 20 % of actual cost of new plant and machinery.

However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.

All taxpayers engaged in:

a) manufacture or production of any article or thing; or

b) generation or transmission or distribution of power (if taxpayer not claiming depreciation on basis of straight line method)

4.

Proviso to Section 32(1)(iia)

Additional depreciation on new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) shall be allowed subject to certain conditions.

Additional depreciation to be allowed at 35 % of actual cost of new plant and machinery.

However, if an asset is acquired and put to use for less than one 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% in next year.

All taxpayers which set up an undertaking or enterprise for production or manufacture of any article or thing in any notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal.

Note:

1. Manufacturing unit should be set-up on or after April 1, 2015.

2. New plant and machinery should be acquired and installed on or after April 1, 2015 but before April 1, 2020.

5.

32AC

Deduction under section 32AC is available if actual cost of new plant and machinery acquired and installed by a manufacturing company after 31-3-2013 but before 1-4-2015 exceeds Rs. 25/100 Crores, as the case may be.(Subject to certain conditions)

15% of actual cost of new asset acquired and installed

Company engaged in business or manufacturing or production of any article or thing

6.

32AD

Investment allowance for investment in new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) if manufacturing unit is set-up in notified backward area in the State of Andhra Pradesh, Bihar, Telangana or West Bengal

(subject to certain conditions)

Investment allowance to be allowed at 15 % of actual cost of new plant and machinery in the year in which such asset is installed.

All taxpayers who acquire new plant and machinery for purpose of setting-up manufacturing unit in notified backward areas in the State of Andhra Pradesh, Bihar, Telangana or West Bengal

Note:

1) New asset should be acquired and installed on or after April 1, 2015 but before April 1, 2020.

2) Manufacturing unit should be set-up on or after April 1, 2015.

3) Deduction shall be allowed under Section 32AD in addition to deduction under Section 32AC if assessee fulfils the specified conditions.

7.

33AB

Amount deposited in Tea/Coffee/Rubber Development Account by assessee engaged in business of growing and manufacturing tea/Coffee/Rubber in India

Deduction shall be lower of following:

a) Amount deposited in account with National Bank for Agricultural and Rural Development (NABARD) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme; or

b) 40% of profits from such business before making any deduction under section 33AB and before adjusting any brought forward loss.

  (Subject to certain conditions)

All assessee engaged in business of growing and manufacturing tea/Coffee/Rubber

8.

33ABA

Amount deposited in Special Account with SBI/Site Restoration Account by assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India

Deduction shall be lower of following:

a) Amount deposited in Special Account with SBI/Site Restoration Account; or

b) 20% of profits from such business before making any deduction under 33ABA and before adjusting any brought forward loss.

(Subject to certain conditions)

All assessee engaged in business of prospecting for, or extraction or production of, petroleum or natural gas or both in India

9.

35(1)(i)

Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions).

Entire amount incurred on scientific research is allowed as deduction.

Expenditure on scientific research within 3 years before commencement of business (in the nature of purchase of materials and salary of employees other than perquisite) is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority.

All assessee

10.

35(1)(ii)

Contribution to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions)

100% of sum paid to such association, university, college, or other institution is allowed as deduction.

All assessee

11.

35(1)(iia)

Contribution to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions)

100% of sum paid to the company is allowed as deduction

All assessee

12.

35(1)(iii)

Contribution to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions)

100% of sum paid to such association, university, college, or other institution is allowed as deduction

All assessee

13.

35(1)(iv) read with 35(2)

Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions)

Entire capital expenditure incurred on scientific research is allowed as deduction.

Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business.

Note:

 i. Capital expenditure excludes land and any interest in land;

 ii. No depreciation shall be allowed on such assets.

All assessee

14.

35(2AA)

Payment to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction.

The payment should be made with the specified direction that the sum shall be used in a scientific research undertaken under an approved programme.

100% of payment is allowed as deduction (Subject to certain conditions).

All assessee

15.

35(2AB)

Any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions).

Expenditure on scientific research in relation to Drug and Pharmaceuticals shall include expenses incurred on clinical trials, obtaining approvals from authorities and for filing an application for patent.

100% of expenditure so incurred shall be as deduction.

Note:

  i.  Deduction shall be allowed if company enters into an agreement with the prescribed authority for co-operation in such research and development and fulfils conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed.

Company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things

16.

35AD

Deduction in respect of expenditure on specified businesses, as under:

a) Setting up and operating a cold chain facility

b) Setting up and operating a warehousing facility for storage of agricultural produce

c) Building and operating, anywhere in India, a hospital with at least 100 beds for patients

d) Developing and building a housing project under a notified scheme for affordable housing

e) Production of fertilizer in India

(Subject to certain conditions)

100% of capital expenditure incurred for the purpose of business is allowed as deduction

Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed where such expenditure is incurred in cash.

All assessee

17.

35AD

Deduction in respect of expenditure on specified businesses, as under:

a) Laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network;

b) Building and operating, anywhere in India, a hotel of two-star or above category;

c) Developing and building a housing project under a scheme for slum redevelopment or rehabilitation

d) Setting up and operating an inland container depot or a container freight station

e) Bee-keeping and production of honey and beeswax

f) Setting up and operating a warehousing facility for storage of sugar

g) Laying and operating a slurry pipeline for the transportation of iron ore

h) Setting up and operating a semi-conductor wafer fabrication manufacturing unit

i) Developing or maintaining and operating or developing , maintaining and operating a new infrastructure facility

(Subject to certain conditions)

100% of capital expenditure incurred for the purpose of business is allowed as deduction provided specified businesses commence operations on or after the prescribed dates.

All assessee

Note: Such deduction is available to Indian company in case of following business, namely;-

(i) Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network

(ii) Developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility.

No deduction of any capital expenditure shall be allowed in respect of which cash payment is made above Rs. 10,000.

18.

35CCC

Expenditure (not being cost of land/building) incurred on notified agricultural extension project for the purpose of training, educating and guiding the farmers shall be allowed as deduction, provided the expenditure to be incurred is expected to be more than Rs. 25 lakhs (Subject to certain conditions).

100% of the expenditure (Subject to certain conditions)

All assessee

19.

35CCD

Expenditure incurred by a company (not being expenditure in the nature of cost of any land or building) on any notified skill development project is allowed as deduction (Subject to certain conditions).

100% of the expenditure (Subject to certain conditions)

Note: (i) No deduction shall be allowed to a company engaged in manufacturing alcoholic spirits or tobacco products.

Company engaged in manufacturing of any article or providing specified services

D. Under the head Capital Gain

Particulars

Section 54

Section 54B

Section 54D

Section 54EC

Section 54EE

Section 54F

Section 54G

Section 54GA

Section 54GB

Eligible taxpayer

Individual and HUF

Individual and HUF

Any person

Any person

Any Person

Individual and HUF

Any person

Any person

Individual and HUF

Capital gains eligible for exemption

Long-term

Short-term or Long-term

Short-term or Long-term

Long-term

Long-term

Long-term

Short-term or Long-term

Short-term or Long-term

Long-term

Capital gains arising from transfer of

Residential House property

Agriculture land used by taxpayer or by his parents or HUF for agriculture purposes in last 2 years before its transfer

Compulsory acquisition of land or building forming part of industrial undertaking (which was used for industrial purposes for at least 2 years before its acquisition).

Long-term capital asset (being Land or Building or both)

Any long-term capital asset

Any long term asset (other than a residential house property) provided on date of transfer taxpayer does not own more than one residential house property (except the new house)

Land, building, plant or machinery, in order to shift industrial undertaking from urban area to rural area.

Land, building, plant or machinery, in order to shift industrial undertaking from urban area to SEZ.

Residential property (house or a plot of land)

Note:

Provisions of this section shall not apply to any transfer of residential property made after March 31, 2017. However, in case of an investment in eligible start-up, the residential property can be transferred up to March 31, 2022.

Assets to be acquired for exemption

One residential house property

Or

Two residential house properties

Note:

With effect from Assessment Year 2020-21, a taxpayer has an option to make investment in two residential house properties in India. This option can be exercised by the taxpayer only once in his lifetime provided the amount of long-term capital gain does not exceed Rs. 2 crores.

Agricultural land (may be in urban area or rural area)

Land or building for shifting or reestablishing said industrial undertaking

Bond of NHAI or REC, etc.

Units of such fund as may be notified by Central Government to finance start-ups

One residential house property

Land, building, plant or machinery, in order to shift industrial undertaking to rural area.

Land, building, plant or machinery, in order to shift industrial undertaking to SEZ.

Subscription in equity shares of an eligible company.

Note:

1. W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company.

2. The eligible company should utilize the amount of subscription for purchase of new assets (i.e., plant and machinery except vehicle, office appliances, computer or computer software etc.). However, In the case of eligible startup, the new asset shall include computers or computer software.

Time limit for acquiring the new assets

Purchase: within 1 year before or 2 years after date of transfer

Construction: within 3 years after date of transfer

Within 2 years after date of transfer

Within 3 years from date of receipt of compensation

Within 6 months from date of transfer

Within 6 months after the date of transfer of original asset

Purchase: within 1 year before or within 2 years after date of transfer

Construction: within 3 years after date of transfer

within 1 year before or 3 years after date of transfer

Within 1 year before or within 3 years after date of transfer

Investment by the assessee - Before due date for furnishing of return under Sec. 139(1).

Investment by the company - within 1 year from date of subscription.

Exemption Amount

Investment in new assets or capital gain, whichever is lower

Note: if the cost of new asset exceeds Rs. 10 crore, the excess amount shall be ignored and Rs. 10 crore shall be taken into consideration

Investment in agricultural land or capital gain, whichever is lower

Investment in new assets or capital gain, whichever is lower

Investment in new assets or capital gains, whichever is lower, however, subject to Rs. 50 lakhs in a financial year.

Investment in new assets or capital gains, whichever is lower, however, subject to Rs. 50 lakhs.

Investment in new assets X capital gain/net consideration

Note: if the cost of new asset exceeds Rs. 10 crore, the excess amount shall be ignored and Rs. 10 crore shall be taken into consideration

Investment in new assets or capital gain, whichever is lower

Investment in new assets or capital gain, whichever is lower

Investment in new assets X capital gain/net consideration

Withdrawal of exemption

If new asset is transferred within 3 years of its acquisition

If new asset is transferred within 3 years of its acquisition

If new asset is transferred within 3 years of its acquisition

If new asset is transferred or it is converted into money or a loan is taken on its security

within 5 years of its acquisition

If new asset is transferred within a period of 3 years from the date of its acquisition.

Note:

Where assessee takes loans or advance on security of such specified asset, he shall be deemed to have transferred such asset on the date on which such loan or advance is taken.

a) If new asset is transferred within 3 years of acquisition,

b) if another residential house is purchased within 2 years of transfer of original asset;

c) if another house is constructed within 3 years of transfer of original asset

If new asset is transferred within 3 years of acquisition

If new asset is transferred within 3 years of acquisition

If equity shares in company or new asset acquired by company is sold or transferred within a period of 5 years from date of acquisition.

Note: w.e.f. Assessment Year 2020-21, the restriction on the transfer of new asset is reduced to 3 years in case of computer or computer software.

Deposit in Capital gains deposit scheme before due date under Sec. 139(1)

Yes

Yes

Yes

No

No

Yes

Yes

Yes

Yes